Best & Worst ETFs, Mutual Funds And Key Holdings: Mid-Cap Blend Style [View article]
My ratings do not take historical performance trends into consideration. My rating on DON is entirely based on my analysis of the fundamentals of its holdings.
Best & Worst ETFs, Mutual Funds And Key Holdings: Mid-Cap Blend Style [View article]
FPX is not among the ETFs that my company, New Constructs, covers. I classify DON as a Midcap Value ETF, and it gets my Dangerous rating due to the fact that it allocated nearly 40% of its assets to stocks that I rate Dangerous-or-worse.
Buy Accenture: Profiting From Others' Innovations [View article]
feedtheworld:
New Constructs does not do price targets as that implies more precision than I believe is possible. However, based on ACN's current cash flows and its historical rate of growth, I think it has to get up around $100/share at least before it starts looking expensive. All my calculations use my own DCF model.
Barnes & Noble (BKS) announces Google Play is available for Nook HD products. Though the move is a further capitulation by B&N from offering up a closed eco-system, it also increases the number of apps available to consumers to 750K from 10K to make the Nook more attractive. Barnes & Noble is also cozying up to Google on the browser front with Chrome set to replace the existing default browser. [View news story]
yet another angle under which AAPL is under attack.
David Trainer's $240 Apple Price Target Analysis Just Doesn't Add Up [View article]
Lastly, my analysis is VERY different from reported values as accounting metrics, esp those provided by Yahoo, are not reliable.
Accounting rules were not designed for equity analysis, there are numerous finance texts that prove this point.
Wiley's The Valuation Handbook dedicates an entire chapter to "Modern Tools for Valuation", which explains why investors need to analyze footnotes to reported financials to perform proper diligence on a firm's earnings. Here is a link to the book: http://bit.ly/101DwfV
I also wrote a detailed explanation of why accounting earnings are not reliable in which I reference several other books on the same topic: http://bit.ly/xzRJkn
Note that all of my calculations are 100% transparent. I show all of the formulas and calculations needed to replicate my analysis.
I do that b/c the dialogue should not be about whose math is better but about what AAPL's long-term future prospects truly are.
Of course, people will try to poke holes in my financial analysis, but that appears to be an attempt to divert this dialogue away from the real issue stated above: Apple's future.
Lopakali: We may speak a different type of English as I do not understand your comments.
Anytime someone refers to ROIC as "obscure" and "bizarre" is lacking in finance knowledge. Quite lacking for one who "covers" any companies or stocks.
Moreover, the author appears to lacking in effort to gain appropriate knowledge by not reading the materials I make available.
Note that all of my calculations are 100% transparent. I show all of the formulas and calculations needed to replicate my analysis.
I do that b/c the dialogue should not be about whose math is better but about what AAPL's long-term future prospects truly are.
Of course, people will try to poke holes in my financial analysis, but that appears to be an attempt to divert this dialogue away from the real issue stated above: Apple's future.
Apple: The Dangers Of Using Bad Data To Calculate Only One Metric [View article]
Analytical Chemist, Thank you for your article on my article.
I wish you had analyzed my model more closely. You would've seen that it accounts for cash, debt, option and tax liabilities.
ROIC is the best metric for assessing the profitability b/c it is the on apples-to-apples measure available.
You will find "ROIC" in nearly every respected book on finance. Wiley gave me a chapter on the topic (and a bit more) in The Valuation Handbook: http://bit.ly/101DwfV
And trust me, few investors analyze more balance sheets than we have at New Constructs. We have thoroughly analyzed over 50,000 annual reports and specialize in balance sheet analysis.
David Trainer's $240 Apple Price Target Analysis Just Doesn't Add Up [View article]
Mr. Kirby, My analysis is VERY different from reported values as accounting metrics, esp those provided by Yahoo, are not reliable.
Accounting rules were not designed for equity analysis, there are numerous finance texts that prove this point.
Wiley's The Valuation Handbook dedicates an entire chapter to "Modern Tools for Valuation", which explains why investors need to analyze footnotes to reported financials to perform proper diligence on a firm's earnings. Here is a link to the book: http://bit.ly/101DwfV
I also wrote a detailed explanation of why accounting earnings are not reliable in which I reference several other books on the same topic: http://bit.ly/xzRJkn
Note that all of my calculations are 100% transparent. I show all of the formulas and calculations needed to replicate my analysis.
I do that b/c the dialogue should not be about whose math is better but about what AAPL's long-term future prospects truly are.
Of course, people will try to poke holes in my financial analysis, but that appears to be an attempt to divert this dialogue away from the real issue stated above: Apple's future.
David Trainer's $240 Apple Price Target Analysis Just Doesn't Add Up [View article]
Mr. Jones: Regarding cash flows, my numbers tend to be very different from reported values for all 3000 stocks I cover b/c I include key data from financial footnotes in my analysis.
My clients compensate New Constructs handsomely for the best and most complete fundamental data on US stocks.
Here is an article I wrote on why reported accounting values are not reliable and how to assess quality of earnings: http://bit.ly/xzRJkn
Lastly, the free cash flow numbers in my model are inconsequential to my analysis, in this case. The perpetuity calculation that underpins the valuation of AAPL assumes that NOPAT equals Free Cash Flow. Past free cash flows are not relevant to my valuation b/c, as you know, the value of an asset equals the present value of future cash flows.
David Trainer's $240 Apple Price Target Analysis Just Doesn't Add Up [View article]
Mr. Jones:
I am not claiming Apple had a 70% ROIC or $10.7 NOPAT in 2012. That was a model with adjusted figures to show what Apple was worth at those levels.
The unadjusted model is here. It shows that Apple had a 271% ROIC and $41.7 billion NOPAT in 2012. The point of my article is that those numbers are unsustainable. http://bit.ly/13oCbjV
I realize having the 70% ROIC under the 2012 heading was a bit confusing, but it was the easiest way to show how my calculations worked on my website. I apologize if it wasn't clear.
Best & Worst ETFs, Mutual Funds And Key Holdings: Mid-Cap Blend Style [View article]
Best & Worst ETFs, Mutual Funds And Key Holdings: Mid-Cap Blend Style [View article]
Buy Accenture: Profiting From Others' Innovations [View article]
New Constructs does not do price targets as that implies more precision than I believe is possible. However, based on ACN's current cash flows and its historical rate of growth, I think it has to get up around $100/share at least before it starts looking expensive. All my calculations use my own DCF model.
Footnotes Diligence Drives Cisco Pick [View article]
New Constructs does not do target prices (imply more precision that I think is possible in this business.
I would say that at its current level of ROIC, the stock has to get over $40/share to start looking expensive.
Barnes & Noble (BKS) announces Google Play is available for Nook HD products. Though the move is a further capitulation by B&N from offering up a closed eco-system, it also increases the number of apps available to consumers to 750K from 10K to make the Nook more attractive. Barnes & Noble is also cozying up to Google on the browser front with Chrome set to replace the existing default browser. [View news story]
David Trainer's $240 Apple Price Target Analysis Just Doesn't Add Up [View article]
http://bit.ly/18OajM2
David Trainer's $240 Apple Price Target Analysis Just Doesn't Add Up [View article]
http://bit.ly/18OajM2
David Trainer's $240 Apple Price Target Analysis Just Doesn't Add Up [View article]
Accounting rules were not designed for equity analysis, there are numerous finance texts that prove this point.
Wiley's The Valuation Handbook dedicates an entire chapter to "Modern Tools for Valuation", which explains why investors need to analyze footnotes to reported financials to perform proper diligence on a firm's earnings. Here is a link to the book: http://bit.ly/101DwfV
I also wrote a detailed explanation of why accounting earnings are not reliable in which I reference several other books on the same topic: http://bit.ly/xzRJkn
Note that all of my calculations are 100% transparent. I show all of the formulas and calculations needed to replicate my analysis.
I do that b/c the dialogue should not be about whose math is better but about what AAPL's long-term future prospects truly are.
Of course, people will try to poke holes in my financial analysis, but that appears to be an attempt to divert this dialogue away from the real issue stated above: Apple's future.
Danger Zone For This Week: Apple [View article]
We may speak a different type of English as I do not understand your comments.
Anytime someone refers to ROIC as "obscure" and "bizarre" is lacking in finance knowledge. Quite lacking for one who "covers" any companies or stocks.
Moreover, the author appears to lacking in effort to gain appropriate knowledge by not reading the materials I make available.
Note that all of my calculations are 100% transparent. I show all of the formulas and calculations needed to replicate my analysis.
I do that b/c the dialogue should not be about whose math is better but about what AAPL's long-term future prospects truly are.
Of course, people will try to poke holes in my financial analysis, but that appears to be an attempt to divert this dialogue away from the real issue stated above: Apple's future.
Apple: The Dangers Of Using Bad Data To Calculate Only One Metric [View article]
Thank you for your article on my article.
I wish you had analyzed my model more closely. You would've seen that it accounts for cash, debt, option and tax liabilities.
ROIC is the best metric for assessing the profitability b/c it is the on apples-to-apples measure available.
You will find "ROIC" in nearly every respected book on finance. Wiley gave me a chapter on the topic (and a bit more) in The Valuation Handbook: http://bit.ly/101DwfV
And trust me, few investors analyze more balance sheets than we have at New Constructs. We have thoroughly analyzed over 50,000 annual reports and specialize in balance sheet analysis.
Here is my analysis of invested capital model here:
http://bit.ly/10qXkfu
Here is the definition of ROIC with links to definitions to NOPAT and Invested Capital:
http://bit.ly/10H2120
Danger Zone For This Week: Apple [View article]
I agree with your points on GOOG and MSFT, they both have much more defensible competitive advantages.
David Trainer's $240 Apple Price Target Analysis Just Doesn't Add Up [View article]
My analysis is VERY different from reported values as accounting metrics, esp those provided by Yahoo, are not reliable.
Accounting rules were not designed for equity analysis, there are numerous finance texts that prove this point.
Wiley's The Valuation Handbook dedicates an entire chapter to "Modern Tools for Valuation", which explains why investors need to analyze footnotes to reported financials to perform proper diligence on a firm's earnings. Here is a link to the book: http://bit.ly/101DwfV
I also wrote a detailed explanation of why accounting earnings are not reliable in which I reference several other books on the same topic: http://bit.ly/xzRJkn
Note that all of my calculations are 100% transparent. I show all of the formulas and calculations needed to replicate my analysis.
I do that b/c the dialogue should not be about whose math is better but about what AAPL's long-term future prospects truly are.
Of course, people will try to poke holes in my financial analysis, but that appears to be an attempt to divert this dialogue away from the real issue stated above: Apple's future.
David Trainer's $240 Apple Price Target Analysis Just Doesn't Add Up [View article]
Regarding cash flows, my numbers tend to be very different from reported values for all 3000 stocks I cover b/c I include key data from financial footnotes in my analysis.
My clients compensate New Constructs handsomely for the best and most complete fundamental data on US stocks.
Here is an article I wrote on why reported accounting values are not reliable and how to assess quality of earnings: http://bit.ly/xzRJkn
Lastly, the free cash flow numbers in my model are inconsequential to my analysis, in this case. The perpetuity calculation that underpins the valuation of AAPL assumes that NOPAT equals Free Cash Flow. Past free cash flows are not relevant to my valuation b/c, as you know, the value of an asset equals the present value of future cash flows.
David Trainer's $240 Apple Price Target Analysis Just Doesn't Add Up [View article]
I am not claiming Apple had a 70% ROIC or $10.7 NOPAT in 2012. That was a model with adjusted figures to show what Apple was worth at those levels.
The unadjusted model is here. It shows that Apple had a 271% ROIC and $41.7 billion NOPAT in 2012. The point of my article is that those numbers are unsustainable.
http://bit.ly/13oCbjV
I realize having the 70% ROIC under the 2012 heading was a bit confusing, but it was the easiest way to show how my calculations worked on my website. I apologize if it wasn't clear.
-David Trainer
Danger Zone For This Week: Apple [View article]